How Many of the Uninsured Can Purchase a Marketplace Plan for Less Than Their Shared Responsibility Penalty?

This analysis uses data from the 2017 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC). The CPS ASEC provides socioeconomic and demographic information for the United Sates population and specific subpopulations. Importantly, the CPS ASEC provides detailed data on families and households, which we use to determine income and household composition for ACA eligibility purposes.

Medicaid and Marketplaces have different rules about household composition and income for eligibility. For this analysis, we calculate household membership and income for both Medicaid and Marketplace premium tax credits for each person individually, using the rules for each program. For more detail on how we construct Medicaid and Marketplace households and count income, see the detailed technical Appendix A available here.

Undocumented immigrants are ineligible for federally-funded Medicaid and Marketplace coverage. Since CPS data do not directly indicate whether an immigrant is lawfully present, we draw on the methods underlying the 2013 analysis by the State Health Access Data Assistance Center (SHADAC) and the recommendations made by Van Hook et. al.15,16 This approach uses the Survey of Income and Program Participation (SIPP) to develop a model that predicts immigration status; it then applies the model to CPS, controlling to state-level estimates of total undocumented population from Pew Research Center. For more detail on the immigration imputation used in this analysis, see the technical Appendix B available here.

Individuals in tax-filing units with access to an affordable offer of Employer-Sponsored Insurance are still potentially MAGI-eligible for Medicaid coverage, but they are ineligible for advance premium tax credits in the Health Insurance Exchanges. Since CPS data indicate whether a worker held an offer of ESI at the time of interview (for the 2017 CPS, February, March, or April 2017) but not during the prior year (which serves as our basis for type of insurance coverage), we developed a model that predicts offer of ESI for any individuals with a change in employment status across the period. Additionally, for families with a Marketplace eligibility level below 250% FPL, we assume any reported worker offer does not meet affordability requirements and therefore does not disqualify the family from Tax Credit eligibility on the Exchanges. For more detail on the offer imputation used in this analysis, see the technical Appendix C available here.

The CPS asks respondents about coverage at the time of the interview as well as throughout the preceding calendar year. People who report any type of coverage throughout the preceding calendar year are counted as “insured.” Thus, the calendar year measure of the uninsured population captures people who lacked coverage for the entirety of 2016 (and thus were uninsured at the start of 2017). We use this measure of insurance coverage in 2016, rather than the measure of coverage at the time of interview, because the latter lacks detail about coverage type that is used in our model.

As of January 2014, Medicaid financial eligibility for most nonelderly adults is based on modified adjusted gross income (MAGI). To determine whether each individual is eligible for Medicaid, we use each state’s reported eligibility levels as of January 1, 2017, updated to reflect state Medicaid expansion decisions as of October 2017 and 2016 Federal Poverty Levels.17 Some nonelderly adults with incomes above MAGI levels may be eligible for Medicaid through other pathways; however, we only assess eligibility through the MAGI pathway.18

The household contribution for a marketplace plan includes the cost of covering all subsidy-eligible individuals in the tax filing unit, including those who might currently be purchasing non-group coverage outside of the exchange. Individuals who are eligible for a Basic Health Plan in New York or Minnesota are included as subsidy-eligibles in this analysis. The penalty for each uninsured non-elderly individual is based on the number of uninsured people in the household. In this analysis, households with incomes below the relevant tax filing threshold, in the Medicaid gap, or where the cost of the cheapest available (subsidized) bronze plan exceeds the affordability standard are considered to not have a penalty. Individuals ineligible to purchase marketplace coverage, such as undocumented immigrants, are excluded from the analysis. There may be additional exemptions which individuals are eligible for, including particular hardships such as medical debt or domestic violence and membership in groups such as a health care sharing ministry or a recognized Indian tribe. Individuals 65 or above are excluded from the analysis.

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